This issue of Standards & Norms examines the legal implications of non-compliance with audit requirements and maintenance of books of account by charitable trusts and institutions. With the introduction of Sections 13(10) and 13(11) by the Finance Act, 2022 (applicable from AY 2023–24), the consequences of failing to obtain an audit report or maintain proper books have shifted from outright denial of exemption to a structured method of income computation. It outlines the operation of these provisions and their practical implications for organizations, along with the applicability of the CBDT circular relating to condonation of delay in filing audit reports. What This Issue Covers: - Whether submission of audit report is mandatory? - Consequences of delay in filing form 10B/10BB - Computation of income under Sections 13(10) and 13(11) - Condonation of delay under CBDT Circular Note – The Income Tax Act, 2025 has been enacted and came into force from 01 April 2026. However, this issue is based on the provisions of the Income-tax Act, 1961, which continue to govern the maintenance of books of account and related reporting requirements as for the Financial Year 2025–26.